Quantifying Non-Tariff Barriers and Assessing their impacts on India’s key Agricultural exports using a Gravity Model

By Saarthak Sharma

PKES Working Paper 2316

December 2023

It is certain that the new world order in international trade restriction for domestic industry protection are not only tariffs but also various non-tariff barriers. As a matter of fact, identifying and measuring the extent of such barriers is far harder, whereas for tariffs, its simply, a numerical value that can be used to estimate the loss of trade and even the loss of welfare to an extent. However, this is not possible for non-tariff barriers simply due to their complexity and intertwining nature with other laws of the particular country as well as with its governmental structure. Thus, measuring such barriers and the extent to which such barriers cause damage to trade is extremely hard to measure accurately. Despite the hardships, several studies have been undertaken to analyse the impact of such barriers on exports of nations. This study aims to conduct a similar analysis for India, keeping in mind the variables that may affect India’s exports, there shall be an attempt to keep the model as explanatory and dynamic as possible. The study will consider data for a period of 10 years, 2010-2020, since the purpose is to judge and compare the impact of Non-tariff barriers relative to tariffs, all the variables included in the model will be considered with the view that they contribute more to the explanatory power of the model and are impacted by or are impactful on non-tariff barriers. The methodologies that are used, as well as the expected results, are discussed in the subsequent sections.

Keywords: World Trade Organization, Non-Tariff Barriers, Tariffs, HS-Codes, Gravity Model

JEL classification: F13 F14